Cloud

The top 10 'arms merchants' of the cloud

cloud technology companies
Image Credit: Rhys A, Flickr

A host of companies have been scrambling for a leadership position in one of the hottest areas of the economy: providing the technology needed by businesses to embrace the cloud.

You could call them the cloud’s arms merchants.

They’re the ones providing the DNA upon which businesses are building all of their apps and infrastructure and which enables it all to all talk together.

They include big, recognized names like IBM and Microsoft but also smaller, emerging companies like MuleSoft, Rightscale, and New Relic. All of them are helping businesses transition to the new era in which applications have to not only run superquickly and cost-efficiently but also run on a mixture of environments — whether on a business’s own servers or over the public cloud.

With all of the activity happening in this sector called the cloud, VentureBeat has decided to create a “Cloud Technology Index.” The index will track the most compelling companies helping businesses adapt to the cloud.

We designed this curated index to help chief information officers, marketing officers, and other buyers make sense of the hundreds of vendors in this varied landscape. We kick it off today by pointing to an initial list of top cloud technology companies [see the following pages] based on interviews we’ve conducted with experts in the field. These companies are the ones that appear to have the most momentum and are clearly on the right side of the push toward the cloud.

However, this is very much a preliminary list, one meant mainly to provoke feedback. We now want to open the discussion to the wider community. We will publish our final index at our CloudBeat 2013 event in two weeks (Sept 9-Sept. 10 in San Francisco) once we’ve heard from those among you who have really used the products. That’s why we’re making a call of action today. If you’ve used any of these products, or their competitors, please let us know what you think (survey here). Even after we get user input, this will be very much qualitative. But we plan to issue update reports frequently.

Separately, we’re also announcing the results of our index of our cloud-based dev tools at CloudBeat.

At CloudBeat, we’ll be debating the future of the cloud and hearing from most, if not all, of the companies listed below.

The cloud market is huge, but expects say that in some ways it’s only just started. The worldwide public cloud service market is about $131 billion in 2013, according to Gartner, which predicts it will grow by 62 percent to more than $160 billion by 2015. That number comes from all of the cloud apps, services and infrastructure that businesses manage every year. Companies will need help making all of these investments work properly. That’s where the cloud integrator companies come in.

Consider this: Enterprise companies alone will buy $22 billion worth of cloud apps, or so-called Software-as-a-Service apps, by 2015, according to Gartner. That’s up from more than $14.5 billion in 2012. These include popular apps as Salesforce, Workday, and Box. Here again, businesses will need help making sure these apps talk with each other in real time, perform reliably, and cost-effectively.


If you fill out a survey on one or more of the products mentioned in this report, we’ll offer you the results of our expanded report about these companies — for free.


You could also call these cloud technology companies the “middleware companies” of the cloud revolution. You have them in every wave of technology revolution. During the client-server revolution, you had companies like BEA that helped created the first standards-based Java application server — a technology other companies adopted to help them to serve their apps. Oracle acquired BEA for $8.5 billion in 2008. Middleware companies like BEA create massive value during a specific era, but they are often transitionary.

The cloud era may actually have fewer of these so-called middleware companies than we’ve seen in previous periods.  That’s because companies seek to be able to use whatever app they want, on top of whatever infrastructure they have. By using APIs, less expensive open-source software, cheap commodity parts, and other free protocols, companies are likely to refuse or avoid paying middlemen large amounts of money for integration.

Indeed, we may see just five breakout integrators this time around, compared to around 10 in previous eras, said Snaplogic CEO Gaurav Dhillon in an interview with VentureBeat. Dhillon knows a thing or two about middleware. He cofounded Informatica, which emerged as a key middleware player in the 1990s when it helped enterprises extract data from their applications. Now he’s leading Snaplogic, which helps integrate cloud apps with other applications.

The cloud era has another difference: Enterprise companies are less likely to want to buy all of their software apps from a single vendor to save costs. They expect to use best-of-breed software, and they expect to glue it all together easily. It is a more “modular” era, as many cloud observers have pointed out. That’s what makes these companies that offer the glue between those modules so significant.

Finally, some very significant companies didn’t make our list in the following pages, including Salesforce, HP, and Rackspace, which are very active in the cloud and can be considered cloud leaders in many respects. We had space for just 10, and we wanted to make sure we included some smaller companies that are showing strong momentum. And there are other reasons we didn’t include these big players. For example, Salesforce’s Heroku platform has very significant traction among developers, and Salesforce is building some very interesting data services for cloud apps. However, the peloton of competitors has caught up in some of these areas. There are now strong alternatives to the Salesforce app platform, especially for developers wanting to develop enterprise grade apps (we’ll mention some below). Another big player, VMware, is also not on the list, but that’s partly because its sister company, Pivotal, did make the list, and we didn’t want to duplicate.

Click through to the following page to see the first company we think is a leader in helping the cloud “grow up.”